RFID keeps lab’s supplies on hand, just in time

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Adapted from: May 6, 2015 Executive War College talk by Sharon Cox: “RFID in the Clinical Laboratory: How We Transformed Inventory Management, Cut Costs, and Improved Productivity.”

The results Saint Francis’ laboratory is achieving in using RFID to manage inventory echo those accomplished in the retailing and apparel industries, says RFID veteran Zawolkow. (He is now CEO of Lab Sensor Solutions, which offers a Bluetooth-driven solution that aims to ensure the quality of health care specimens while in transit through real-time temperature and location monitoring.)

“It was the kind of thing I’d been hearing about from general retail,” says Zawolkow, who attended Cox’s War College talk. “There was a similar savings that they were achieving because they were basically able to keep their inventories lower and still be able to fill the need for the items. And also everything was a lot more accurate and they didn’t lose things as much, and they were able to keep track of when things came in and when things left, and when things were used and when, in the retail case, things were put on shelves and moved from shelves.

“What it [RFID] allows you to do is do inventory much more frequently and, in some cases, completely automate inventory,” he adds, noting that RFID error rates are generally “very low.” The two substances that can impede accurate scans are metal and liquid.

Cox and her colleagues at Saint Francis ran into trouble with these very materials.

“Lots of blood gas vendors use foil to ship their cartridges, and RFID energy is absorbed into that. It can’t detect the tag on a big foil wrapper,” Cox says. “And RFID energy is absorbed by liquid, so it doesn’t work well on a huge container of liquid.”

Some liquid supplies such as wash buffer solution are shipped in large Cubitainers. For those items, the laboratory uses barcoding to track inventory.

Together, these kinds of supplies account for about three percent of the laboratory’s total inventory, Cox says. She and her colleagues did come up with a clever workaround for those foil-wrapped containers. They attach the RFID tag to a 3 × 5 inch index card and then stick the card to the wrapper. “Simply adding that air gap between the foil wrapper and the RFID tag” does the trick, Cox says.

The RFID switch also has led to changes in how inventory is stored, she said.

“Now, we have to be a little more careful in how we orient stuff in the refrigerator. We have learned how to position things so that we get advantageous read rates,” Cox said. “For example, reagents, when they come in, are in square, cardboard boxes. If you have two RFID tags that touch each other, they won’t be able to be read. So you can’t just sling it into the refrigerator. We stack it so all the RFID tags face to the right.”

The Saint Francis laboratory has four handheld RFID readers and two stationary portal readers, one on the receiving dock and one in the lab. They have two readers in the ceiling that track the movement of items. As a beta site for the Abbott Inventory Manager, the laboratory received a price break on the system, Cox said. The lab’s two-year agreement with Abbott expires in October 2015, and the plan is to keep the system.

Greg Ahlberg, Abbott’s vice president of diagnostics in the U.S., provided this statement in response to CAP TODAY questions about pricing.

“Every solution is customized based on each lab’s inventory management processes, and therefore the price of the system is dependent on the individual solution’s design. Sites choosing to adopt Abbott’s Inventory Manager solution and algorithms,” he said, “have seen significant benefits through reductions in time spent managing inventory as well as lowering inventory levels, thereby decreasing inventory carrying cost. One site adopting Abbott’s solution saw a return on investment in less than one year.”

In response to a separate question about whether Abbott’s RFID system would work well for a non-Abbott shop, Ahlberg said: “While Abbott does not need to be the primary vendor supplier, there are additional potential efficiencies when choosing Abbott products as we pre-tag our products.”

He added that potential benefits for laboratories using the Abbott Inventory Manager include better use of staff, lower send-out costs, reduced overnight shipping expenses, less product waste, and smaller inventory holding costs.

The company, which began offering the system in the U.S. last year, said it is keeping confidential the number of laboratories that have installed the Abbott Inventory Manager. In February, Siemens launched a similar product, called Syngo Lab Inventory Manager. A Siemens spokesperson said she was unable to provide information regarding pricing or the number of installations.

One laboratory leader who attended Cox’s War College talk said he wants to know more about costs.

Dr. Sossaman

“I thought the presentation was fantastic, but I do wish there had been some discussion on pricing. That is probably the deciding factor in doing something different for us,” Gregory Sossaman, MD, tells CAP TODAY. He is system chair of pathology and laboratory medicine at Ochsner Health System in New Orleans.

“Unfortunately, all of our practices now are entirely manual, and although I could really see some advantages to the system that Saint Francis uses, I’m still not entirely sure how I would justify the cost of implementing their solution.”

For her part, Cox says any laboratory big enough to have implemented an automated track system “will have enough volume to pay for this.”

“We were able to figure out in this lab that we were able to save hard dollars very quickly by using this system,” she adds. Amid an 18-month transition to the Epic health information system during which the C-suite put a hold on any big purchases, executives gave the OK for the lab’s switch to RFID.

“Our administration saw the value of it,” Cox says.
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Kevin B. O’Reilly is CAP TODAY senior editor.